Sectoral and regional impacts of the European Carbon Market in Portugal

Across Europe, CO2 emission permits represent one of the main policy instruments to comply with the limits established by the European Commission to achieve the goals of the Kyoto Protocol. In this paper we use microdata to address two issues regarding the impact of the European Carbon Market (EU ETS). On the one hand, we analyse the sectoral effects of the EU ETS in Portugal. The main goal is to study the outcomes of this policy in terms of the transactions carried out between sectors, as well as the distributive consequences. On the other hand, we also look at the regional impact. The pre-existing specialization of different regions in the production of different goods and services might lead to an uneven economic impact of the new permit market. In particular, Portuguese data indicate a distribution of revenue from low income to high income regions, or rather, between installations located in those regions. We focus on the first two years of operation of the EU ETS, using data for each one of the 244 Portuguese installations regulated by this market as well as financial data for 80% of these installationsRegional impact, sectoral impact, tradable CO2 permits, European Carbon Market.

Impostos ambientais e o duplo dividendo: experiências europeias

reforma ambiental, duplo-dividendo, desemprego, poluição, impostos ambientais, impostos sobre o trabalho

Efeitos de uma reforma fiscal ecológica em Portugal: análise de equilíbrio geral

Doutoramento em EconomiaDo ponto de vista da política económica, existe a possibilidade de utilizar a receita dos impostos ambientais para baixar os impostos sobre o trabalho, promovendo assim o emprego. Esta oportunidade surge na literatura como forma dos países industrializados responderem a um duplo desafio: um crescente nível de poluição e um decrescente nível de emprego. Alguns países tomaram já decisões no sentido de alcançar o “duplo dividendo”: melhorias ambientais e diminuição do desemprego. Os resultados teóricos, na sua maioria cépticos em relação à verificação do segundo dividendo, são substancialmente contrariados por uma série de estudos que utilizam modelos de equilíbrio geral. Pretendese com este trabalho fazer uma simulação para a economia portuguesa de uma reforma fiscal ambiental com as características referidas e a verificação da existência do “duplo dividendo”, através de um modelo computacional de equilíbrio geral. Para além disso, é feita uma análise dos impactos do Mercado Europeu de Licenças de Emissão, ao nível sectorial e regional, em Portugal, utilizando dados microeconómicos, com o objectivo de estudar as consequências ao nível das trasacções entre sectores e efeitos distributivos entre regiões.A discussion has arisen amongst economic policy-makers, about using the revenue of environmental taxes to lower labor taxes, thus improving employment. This possibility appears in literature as an answer to a double challenge facing industrialized countries: the increasing level of pollution and decreasing level of job creation. Some countries have already taken decisions in the direction of the “double dividend”: environmental improvements and reduction of unemployment. The theoretical results, mostly skeptical to this second dividend, are substantially opposed by empirical studies that use general equilibrium models. The goals of this work are to make a simulation for the Portuguese economy of a Green Tax Reform with the referred characteristics and to verify the “double dividend” hypothesis, through a computational general equilibrium model. An analysis of the impacts of the European Carbon Market is also made, both at the sectoral and regional level, in Portugal, using micro data, with the objective of studying the consequences on the transactions between sectors and the distributive effects between regions

Três ensaios sobre ambiente, energia e economia em Portugal

Esta dissertação é constituída por três ensaios independentes, mas ao mesmo tempo complementares. O primeiro , intitulado “Impostos Ambientais e o Duplo Dividendo – Experiências Europeias”, dá-nos um esclarecimento sobre os diferentes tipos de Taxas Ambientais existentes e faz uma avaliação das suas vantagens e inconvenientes. Define os conceitos de Reforma Fiscal Ecológica (RFE) e de “duplo dividendo”. A ideia é a de que o financiamento dos gastos públicos com impostos ambientais pode gerar um duplo dividendo, se as receitas forem utilizadas para cortar noutros impostos que impliquem uma grande carga excedentária. A União Europeia sugere que se financie uma redução das contribuições para a Segurança Social com as receitas de um imposto sobre a energia. Uma acção deste tipo dá origem a um duplo dividendo, uma vez que promove a melhoria das condições ambientais e ao mesmo tempo reduz o desemprego. Procede-se a uma revisão de literatura, com os principais estudos teóricos que abordam o tema, apresentando experiências europeias de RFE, bem como resultados dessas experiências e simulações ex ante realizadas para vários países. È mostrada também a situação de Portugal em matéria de política ambiental e apontados alguns requisitos gerais que podem dar origem à obtenção do duplo dividendo. Dada a orientação da Comissão Europeia no sentido de tomar o imposto sobre o carbono–energia como o imposto a aplicar ou a aumentar numa reforma ambiental, um segundo trabalho analisa o “Sector da Energia em Portugal”, em particular, a oferta e a procura de energia durante o período 1990-2000, por tipos de energia e por sectores de actividade. È também focado o papel do sector energético na economia portuguesa, com o seu contributo para o produto, emprego, investimento e comércio externo. O último trabalho consiste num estudo empírico, intitulado “Consumo de Energia e Desempenho Económico em Portugal”, e tem por base um modelo econométrico autoregressivo, que utiliza os dados da economia portuguesa para perceber o impacto de choques no consumo de energia no resto da economia, qual a relação existente entre as variáveis macroeconómicas como o emprego, o investimento e o produto e qual o papel do sector da energia no desempenho da economia portuguesa. ABSTRACT: This dissertation is composed of three independent papers, which are at the same time complementary. The first gives a clarification on the different types of environmental taxes and makes an evaluation of their advantages and inconvenients. It defines the concepts of Green Tax Reform (GTR) and “double dividend”. The idea is that financing public expenses with environmental taxes can generate a double dividend, if the funds are used to cut taxes that imply a large deadweight loss. The European Union suggests that a reduction of Social Security contributions can be financed with the revenue from an energy tax. This combination originates a double dividend, since it improves environmental conditions and at the same time reduces unemployment. This paper also undertakes a revision of the literature, presenting european experiences of GTR, as well as their results and some ex ante simulations. The Portuguese situation in terms of environmental policies is presented and some general requirements that can lead to a double dividend are pointed out. Given the orientation from the European Commission to take energy tax as the main tax to apply or increase in an environmental fiscal reform, the second paper analyzes the Portuguese energy sector, particularly energy demand and supply during the period 1990-2000, for different types of energy and sectors of activity. It also focuses on the importance of the energy sector in the Portuguese economy, analysing its contribution for product, employment, investment and external trade. The last paper, consists of an empirical study based in a vector autoregressive /vector error correction model, that uses data from the portuguese economy to anallyse the impact of energy consumption shocks on some economic variables, like product, investment and employment, and to discuss the existing relation between these variables and energy consumption in Portugal

A new frontier approach to model the eco-efficiency in European countries

This study aims to evaluate the resource and environment efficiency problem of European countries. We specify a new stochastic frontier model where Gross Domestic Product (GDP) is considered as the desirable output and Greenhouse Gases (GHG) emissions as the undesirable output. Capital, Labour, Fossil fuels and Renewable Energy consumption are regarded as inputs. GDP/GHG ratio is maximized given the values of the other four variables. The study is divided into two distinct periods: 2000-2004 and 2005-2011. This division is related to the implementation of the Kyoto Protocol in 2005, and will allow us to evaluate the difference between the levels of efficiency before and after the establishment of environmental targets. Since stochastic frontier models are typically ill-posed, a new maximum entropy approach to assess technical efficiency, which combines information from the data envelopment analysis and the structure of composed error from the stochastic frontier approach without requiring distributional assumptions, is presented in this work

Sectoral and regional impacts of the European carbon market in Portugal

Across Europe, CO2 emission allowances represent one of the main policy instruments to comply with the goals of the Kyoto Protocol. In this paper we use microdata to address two issues regarding the impact of the European Carbon Market (EU ETS). First, we analyze the sectoral effects of the EU ETS in Portugal. The goal is to study the distributive consequences of imbalances, with the novelty of taking into account firm financial data to put values into context. We show that a large majority of installations in most sectors had surpluses and the opportunity to raise remarkable revenues in some cases. We also look at the regional impact, since the pre-existing specialization of different regions in the production of different goods and services might lead to an uneven economic impact of the allowance market. In particular, Portuguese data indicate a distribution of revenue from low income to high income regions, or rather, between installations located in those regions. We focus on the first phase of the EU ETS, using data for each one of the 244 Portuguese installations in the market as well as financial data for 80% of these installations, although we also present data for 2008 and 2009.Regional impact Sectoral impact European carbon market

Sectoral and regional impacts of the European carbon market in Portugal

Across Europe, CO2 emission allowances represent one of the main policy instruments to comply with the goals of the Kyoto Protocol. In this paper we use microdata to address two issues regarding the impact of the European Carbon Market (EU ETS). First, we analyze the sectoral effects of the EU ETS in Portugal. The goal is to study the distributive consequences of imbalances, with the novelty of taking into account firm financial data to put values into context. We show that a large majority of installations in most sectors had surpluses and the opportunity to raise remarkable revenues in some cases. We also look at the regional impact, since the pre-existing specialization of different regions in the production of different goods and services might lead to an uneven economic impact of the allowance market. In particular, Portuguese data indicate a distribution of revenue from low income to high income regions, or rather, between installations located in those regions. We focus on the first phase of the EU ETS, using data for each one of the 244 Portuguese installations in the market as well as financial data for 80% of these installations, although we also present data for 2008 and 2009.FCT-SFRH/BD/16726/200

Assessing the impacts of climate change on hydropower generation and the power sector in Portugal: A partial equilibrium approach

Hydropower plays a major role in the Portuguese electrical mix. Given the projected impacts of climate change on the availability of water resources, effects on hydropower generation are widely recognized though scantily quantified in literature. Considering projected climate change impacts on water resources in Portugal, we use a partial equilibrium bottom-up optimization model (TIMES_PT) to assess the effects of climate change on the Portuguese electrical system by 2050 – particularly focusing on the impacts on water resources availability and hydropower generation. Results show that hydropower generation may decrease by 41% in 2050. Hydropower will remain one of the most cost-effective technologies in the power sector, though it will lose as compared to other renewable energy sources (solar PV and wind power) due to, not only, the almost fully exploited endogenous hydropower potential, but also, due to climate change impacts. This will result in higher electricity prices (up to a 17% increase). Moreover, the stronger the climate change impacts the higher the levels of greenhouse gas emissions (up to 7.2% increase) – thus demanding stronger political action to comply with EU climate goals for 2050.publishe